|
Our reporter Guo Lei/Wen
Due to the extremely hot warrant markets in mainland China and Hong Kong, China has become the leading player in the global warrant market. Although the warrant market in the mainland is young, it has developed rapidly. At present, the warrant market with only three warrant varieties has exceeded the Hong Kong market with a history of more than 10 years. Next Monday, Shenzhen Stock Exchange will launch three warrants for the first time. On the same day, 24 warrants of China Construction Bank will also be collectively unveiled in Hong Kong, and 19 warrants of China Shenhua, a popular new stock, will be launched on the first day
Records of.
Speculation Vs supervision
Ms. Li Songci, Executive Director of Goldman Sachs and Head of Securitization Derivatives in Asia, pointed out that the prices of the three warrants in mainland China were indeed outrageously high. On the first day of listing of WISCO warrants, the two warrants with opposite directions of change, call warrants and put warrants, went up and down together, which was unreasonable. Of course, the maturity of the market takes time, as did the initial stage of the Hong Kong warrant market. "But I am glad to see that mainland securities companies have also been allowed to create warrants. I hope that the market can gradually cool down as the supply of warrants increases." She suggested that the supervision of warrants should improve the rules of the game in a timely manner as the market environment gradually improves, and issuers should also fully introduce the characteristics of warrants to investors, At the same time, warrant brokers should also let customers clearly understand the basic knowledge of warrant trading and remind customers of the risk of warrant trading.
Li Jin, Senior Vice President of Derivatives Department of Societe Generale (Hong Kong) Co., Ltd., believes that the system should be built step by step, and the most important thing is to have clear regulatory regulations. He also said: "The responsibility of the liquidity provider is to enable investors to buy and sell warrants smoothly under normal market conditions. The warrant markets in Europe, Singapore and Hong Kong all have such a role to ensure that investors do not want to sell or buy, thus affecting investor confidence."
Yang Xiaolin, a postdoctoral fellow at the Institute of World Economy and Politics of the Chinese Academy of Social Sciences and the asset management headquarters of Guosen Securities, said that the popularity of domestic warrant trading was unexpected, but also reasonable. At present, the domestic capital is abundant and the interest rate is at a historical low. After large-scale investment in the real estate and futures markets, hot money is gradually turning to the securities market. The timely launch of warrants meets the needs of the market. Of course, the current price of warrants is not low, and investors need to pay attention to investment risks when investing.
Decentralized transaction Vs centralized transaction
Both Li Songci and Li Jin believe that the decentralized trading of Hong Kong warrants and the centralized trading of the mainland have their own advantages and disadvantages.
Li Songci said that Hong Kong adopted the way of independent issuance of warrants by issuers. First, issuers should have strong financial resources to ensure that investors can exercise their rights on the maturity date; Secondly, the issuer must have a strong market making ability to independently provide a warrant with sufficient circulation. The centralized trading in the mainland can make the price of warrants closer to a reasonable level through the game between issuers. In the early stage of market development, due to the lack of experience of issuers, centralized trading was more reasonable. In mature markets such as Hong Kong and Europe, although there are many warrants, the circulation of some warrants is very low, which requires investors to have the ability to distinguish between good and bad. Li Songci suggested that as the market matures, the mainland market may wish to gradually increase the variety of warrants.
Li Jin said that in the case of decentralized transactions, issuers need to be responsible for their issued warrants, and the responsibilities and rights are relatively clear. For investors, although a variety of issuance terms will increase the difficulty of investors' judgment, it also means that investors have more choice opportunities, while centralized trading shows the opposite situation, and it is hard to say which way is better. At present, the mainland warrant market has just started. We can start with simple centralized trading, and then slowly explore whether other methods need to be introduced.
Yang Xiaolin believes that Hong Kong's approach puts investors in a relatively unfavorable position. In order to avoid competition and meet the needs of various investors, issuers often issue many warrants at the same time. However, most investors do not have the professional skills of warrant valuation, so it is difficult for ordinary investors to judge when facing a large number of warrants, We have to rely on the recommendation of the broker. At present, in China, warrants can only be created on the basis of share reform warrants. There is only one transaction code for similar warrants and the terms are the same, which greatly increases the circulation of warrants. In addition, centralized trading mode is adopted in China, which makes it more difficult to manipulate the price of warrants, so the transaction is more active and the market is more efficient.
Cash settlement Vs Stock settlement
Li Songci said that the initial stage of the development of Hong Kong warrant market was pure stock settlement. After the parallel stage of cash settlement and stock settlement, it has now transitioned to pure cash settlement. Taking warrants as an example, investors need to take cash to exercise their rights and exchange for positive shares on the settlement date, but in fact many warrant investors are unwilling to do so. In Hong Kong, investors do not have to pay stamp duty if they settle in cash, which is also the reason for the increase in the trading volume of warrants.
Li Jin believes that cash settlement provides a great degree of freedom for Hong Kong issuers. If the settlement is based on positive shares, the issuer must buy positive shares for reserve, while for cash settlement, the issuer can buy other products besides positive shares to hedge risks. Therefore, cash settlement helps to reduce the issuance cost of warrants, reduce the price of warrants, and benefit investors. The mainland regulatory authorities have proposed that issuers must exchange regular shares, which increases the protection for investors.
Yang Xiaolin believes that the Hong Kong approach has reduced the opportunity cost for issuers to manipulate stock prices, making it easier for issuers to manipulate stock prices. Issuers can pull the share price up or down on the settlement day, while retail investors who are completely unaware of their operations have a low chance of winning in this game of asymmetric information.
Credit issuance Vs guarantee issuance
Li Songci said: "The issuers recognized by the Hong Kong regulatory authorities are all large multinational investment banks. Their strength is very strong, and their international debt rating is also very high. The risk that investors cannot exercise their share options due to the issuer's financial difficulties on the maturity date is actually very small, so there is no need to pledge. However, the mainland is different. The strength and rating of issuers are quite uneven, so compulsory full guarantee issuance is required. I think regulators can actually consider bank credit guarantee, which is actually enough to ensure the exercise of stock options. "
Li Jin believes that emerging markets usually choose the compulsory full guarantee issuance of exchanges, which was also done in Hong Kong long ago. In fact, there are both advantages and disadvantages - the issuing cost of the issuer will inevitably increase, but there will be more protection for investors.
Yang Xiaolin said that domestic securities companies and investors are unfamiliar with the creation of warrants, and the option of compulsory full guarantee issuance is conducive to the long-term stable development of the warrant market.
|
